The Australian government has canceled some small joint infrastructure projects with China, but Beijing’s response to the move has been outrageous and threatening. The Chinese embassy in Canberra deemed the move reckless and aggressive and vowed to fight back.
Australia passed a law last year that allows the central government to terminate several infrastructure contracts signed between the states and the Chinese government.
President Xi Jinping launched his international project to build the “Belt and Road Initiative”, the so-called “Silk Road”, which aims to improve China’s access to international markets and resources and strengthen the influence of Beijing in foreign countries.
The Australian state of Victoria signed agreements with China to build infrastructure in 2018 and 2019, but Australian Foreign Minister Marise Payne said the agreements went against the country’s foreign policy and carried no legal weight.
Australia banned Huawei from
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“Hard hit”
The cancellation of the agreements marks the end of cooperation in the industrial, biotechnological and agricultural sectors between China and Australia. Heribert Dieter of the German Institute for International Affairs and Security (SWP) says that the cancellation of the agreements was a blow to China.
For Dieter, it is a bilateral issue and relations between the two countries have deteriorated for three years. But this is an extremely serious loss for China. The world has taken notice and shows that there is growing opposition in Western countries to the Silk Road ”, he explains.
China has imposed tariffs on Australian exports after Canberra’s criticism of Beijing’s more aggressive foreign policy. The Australian government has called for a full investigation into the origins of the new coronavirus pandemic and was the first Western country to ban the phone company Huawei from its 5G network.
Domino effect
The German expert tells DW that the Australian government’s decision could lead to delays or withdrawals from other countries involved in the Silk Road. The Chinese initiative has lost momentum, in part also due to the Covid-19 pandemic, which has left many of China’s other partners facing the economic crisis, mainly poor countries in Asia and Africa.
Dieter: “The pandemic is not practical for China”
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Dieter explains that the pandemic is embarrassing for China because many countries are experiencing great economic difficulties. It starts with the main partner country, Pakistan. Other even poorer Silk Road partner countries are in the same situation.
“China must now think about how, as a donor country, it will deal with the new situation. And it should extend the terms of the loans or, in general, leave the projects in the background for the moment, “explains the analyst.
“Scandalous clauses”
But little is known about the fine print of most of China’s loan agreements with Silk Road’s partner countries. Researchers from the Kiel Institute for World Economics (IfW) and Georgetown University in the United States evaluated 100 of the initiative’s loan agreements and published them in a study titled “How China Lends.” [Como a China Empresta].
According to the study, Chinese contracts contain “unusual confidentiality clauses that prohibit borrowers from disclosing the terms or even the existence of the debt,” the study authors wrote. “Chinese creditors have also gained an advantage over other creditors by excluding Silk Road debts from being included in debt cancellation” coordinated by the Paris Club, a group of officials from major creditor countries that help countries in difficulty. financial
The study also concluded that “Chinese contract cancellation, acceleration and stabilization clauses allow creditors to influence debtors’ internal and external policies.”
Qingbaijiang Port Railway, where freight trains travel from China to Europe
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Dieter calls these clauses “outrageous” because, as the Chinese government puts it, they are not private loan agreements that do not need to be disclosed. Even if, on the Chinese side, [feitos por] private actors in the name, are actors supported by the State ”.
The great players react
Dark contracts have become the norm for Silk Road, Dieter says, and “corruption” has also helped secure several deals. He gave the example of Montenegro, “where they built an absurdly expensive road, possibly as a result of grafts by previous governments.”
Australia could be the “canary in the coal mine” due to the world’s growing reluctance to be intimidated by China. There has been a sharp increase in the willingness of the Indo-Pacific countries to build alliances against China, Dieter says, setting the example of the new military collaboration between Australia, India, Japan and the United States.
It would be a blow to the Chinese narrative to find out that not only Australia, which is relatively small in terms of population, but also the big players are saying goodbye to the Silk Road and therefore the prospect of cooperation closer to China. “. Dieter says.
The Mombasa-Nairobi railway structure, Kenya, was built in partnership with China
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The biggest obstacle in the EU
The European Union (EU) is also showing signs of a change in attitude towards China’s ambitions. EU states that were once very friendly to China, such as Italy, increasingly support the return of closer ties between Europe and the United States, Mikko Huotari, director, told DW. From the MERICS China expert group in Berlin.
“There is already a danger that the German government, in the last months of the Merkel Chancellery, will remain tied to a course in its Chinese policy that does not recognize that the tide has also turned in many other EU member states,” says Huotari . .
Dieter shares this assessment, who said that the German government was “the greatest obstacle to the development of a common Chinese policy among the industrialized countries of the West.” He said the government also sent the wrong signal by adopting the EU-China Comprehensive Investment Agreement, which aims to force Beijing to open up its economy.
Although criticism of China is now fierce in almost all European capitals, Berlin is “just holding back,” Dieter said.
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Australia banned Huawei from
–
“Hard hit”
The cancellation of the agreements marks the end of cooperation in the industrial, biotechnological and agricultural sectors between China and Australia. Heribert Dieter of the German Institute for International Affairs and Security (SWP) says that the cancellation of the agreements was a blow to China.
For Dieter, it is a bilateral issue and relations between the two countries have deteriorated for three years. But this is an extremely serious loss for China. The world has taken notice and shows that there is growing opposition in Western countries to the Silk Road ”, he explains.
China has imposed tariffs on Australian exports after Canberra’s criticism of Beijing’s more aggressive foreign policy. The Australian government has called for a full investigation into the origins of the new coronavirus pandemic and was the first Western country to ban the phone company Huawei from its 5G network.
Domino effect
The German expert tells DW that the Australian government’s decision could lead to delays or withdrawals from other countries involved in the Silk Road. The Chinese initiative has lost momentum, in part also due to the Covid-19 pandemic, which has left many of China’s other partners facing the economic crisis, mainly poor countries in Asia and Africa.
Dieter: “The pandemic is not practical for China”
–
Dieter explains that the pandemic is embarrassing for China because many countries are experiencing great economic difficulties. It starts with the main partner country, Pakistan. Other even poorer Silk Road partner countries are in the same situation.
“China must now think about how, as a donor country, it will deal with the new situation. And it should extend the terms of the loans or, in general, leave the projects in the background for the moment, “explains the analyst.
“Scandalous clauses”
But little is known about the fine print of most of China’s loan agreements with Silk Road’s partner countries. Researchers from the Kiel Institute for World Economics (IfW) and Georgetown University in the United States evaluated 100 of the initiative’s loan agreements and published them in a study titled “How China Lends.” [Como a China Empresta].
According to the study, Chinese contracts contain “unusual confidentiality clauses that prohibit borrowers from disclosing the terms or even the existence of the debt,” the study authors wrote. “Chinese creditors have also gained an advantage over other creditors by excluding Silk Road debts from being included in debt cancellation” coordinated by the Paris Club, a group of officials from major creditor countries that help countries in difficulty. financial
The study also concluded that “Chinese contract cancellation, acceleration and stabilization clauses allow creditors to influence debtors’ internal and external policies.”
Qingbaijiang Port Railway, where freight trains travel from China to Europe
–
Dieter calls these clauses “outrageous” because, as the Chinese government puts it, they are not private loan agreements that do not need to be disclosed. Even if, on the Chinese side, [feitos por] private actors in the name, are actors supported by the State ”.
The great players react
Dark contracts have become the norm for Silk Road, Dieter says, and “corruption” has also helped secure several deals. He gave the example of Montenegro, “where they built an absurdly expensive road, possibly as a result of grafts by previous governments.”
Australia could be the “canary in the coal mine” due to the world’s growing reluctance to be intimidated by China. There has been a sharp increase in the willingness of the Indo-Pacific countries to build alliances against China, Dieter says, setting the example of the new military collaboration between Australia, India, Japan and the United States.
It would be a blow to the Chinese narrative to find out that not only Australia, which is relatively small in terms of population, but also the big players are saying goodbye to the Silk Road and therefore the prospect of cooperation closer to China. “. Dieter says.
The Mombasa-Nairobi railway structure, Kenya, was built in partnership with China
–
The biggest obstacle in the EU
The European Union (EU) is also showing signs of a change in attitude towards China’s ambitions. EU states that were once very friendly to China, such as Italy, increasingly support the return of closer ties between Europe and the United States, Mikko Huotari, director, told DW. From the MERICS China expert group in Berlin.
“There is already a danger that the German government, in the last months of the Merkel Chancellery, will remain tied to a course in its Chinese policy that does not recognize that the tide has also turned in many other EU member states,” says Huotari . .
Dieter shares this assessment, who said that the German government was “the greatest obstacle to the development of a common Chinese policy among the industrialized countries of the West.” He said the government also sent the wrong signal by adopting the EU-China Comprehensive Investment Agreement, which aims to force Beijing to open up its economy.
Although criticism of China is now fierce in almost all European capitals, Berlin is “just holding back,” Dieter said.
–
Related posts:
On one condition... Italy is ready to receive more "legal immigrants" than EgyptLandslide due to 'fast clay' is nothing new for NorwayThe referendum of the Ukrainian separatist area 4 kicks off, Russia claims to use nuclear weapons to...Manny Machado hits his 18th homer in San Diego's win over the Pirates
The Mombasa-Nairobi railway structure, Kenya, was built in partnership with China
–
The biggest obstacle in the EU
The European Union (EU) is also showing signs of a change in attitude towards China’s ambitions. EU states that were once very friendly to China, such as Italy, increasingly support the return of closer ties between Europe and the United States, Mikko Huotari, director, told DW. From the MERICS China expert group in Berlin.
“There is already a danger that the German government, in the last months of the Merkel Chancellery, will remain tied to a course in its Chinese policy that does not recognize that the tide has also turned in many other EU member states,” says Huotari . .
Dieter shares this assessment, who said that the German government was “the greatest obstacle to the development of a common Chinese policy among the industrialized countries of the West.” He said the government also sent the wrong signal by adopting the EU-China Comprehensive Investment Agreement, which aims to force Beijing to open up its economy.
Although criticism of China is now fierce in almost all European capitals, Berlin is “just holding back,” Dieter said.
–
